Baking chocolate is a niche category that walks on a fine line between confections and bakery, but startup Artisan Kettle Organic Chocolate has found great opportunity in it and is ready to make its products prevail throughout the year.

Founder Beth Goeddel said the US baking chocolate category is worth a billion dollars in sales annually.

“While the majority of that revenue comes from mainstream brands, such as Nestlé and Hershey, the real growth is all in the premium and organic segment,”​ she said. “Last year, organic foods grew well over 30% in sales.”​

Very few Artisan Kettle’s products use high percentage of cocoa because the American palate tends to like more ‘middle of the road’ level cocoa: not too rich or bitter flavor especially in baking, said Goeddel.

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Knowing this trend, Goeddel decided to jump on the organic wagon and unlocked the potential of organic baking chocolate – that was how Artisan Kettle started about a year and eight months ago.

So far, the team has been operating as a retail brand under Clasen Quality Chocolate, a manufacturer of confectionery coatings, fillings and chocolate, producing four varieties of baking chocolate chips: semi-sweet, bitter sweet, white and milk, according to Goeddel.

“Our parent company is able to produce chocolate and value-added packaging for us,”​ she said. “So we’re a small piece within a larger pie.”​

Mid-level cocoa for American palate

The business officially took off about a year ago when Goeddel and her team started rapidly expanding their distribution and product lines.

“We started with one retailer, a division of Kroger in November 2016… and we’re now in over 1,000 stores including Meijer, Jewel, and independent and natural co-ops across the US,”​ she said.

In January 2018, Artisan Kettle added a new line of baking bars, all vegan and free from soy, nut and other allergens. On June 1, the company will also introduce two types of chocolate chips and chunks.

However, very few Artisan Kettle’s products use high percentage of cocoa. Does it try to go against the current dark chocolate trend?

“You see companies develop chocolate bars with high level of cocoa, 85% to 90%. The European palate is very used to that, yet the American palate tends to like more ‘middle of the road’ level cocoa: not too rich or bitter flavor especially in baking,”​ Goeddel explained.

“[Even though] we don’t see that much volume growth [of dark chocolate] in the baking segment, you do see a small demand in the organic segment, so we’re launching 75% extra dark chocolate chunks,”​ she continued.

‘Breakfast is all year round…’

Artisan Kettle is currently in the “startup mode,”​ but when its growth hits a plateau, it will probably face what many seasonal products do: “the end of the year is always stronger than the beginning because of the higher consumer demand for baking products around holidays like Thanksgiving,”​ said Goeddel.

“The baking category spikes less frequently in sales than candy – about 43% of retail sales are done in Q4. So it’s a definitely a back loaded business,”​ she said.

“Eventually, we’re looking for ideas that take us beyond just the baking season, and make our products available throughout the year by targeting other usage occasions, such as pancakes, because breakfast is all year round.”​

The company is also scaling up its online strategy, transitioning from selling products in cases only to selling small quantities, three to six bags at a time, added Goeddel.

“We’ve been selling our chocolate on Amazon since November 2016. E-commerce is a small part of our business but sales have been growing every month,”​ she said. “For the time being, we decided not to sell through our own website and leave [online business] to e-commerce experts.​

“We plan to grow our volume by 400% in 2018, and double our business in the next two years,”​ said Goeddel.